Big individual health insurance rate increases could hurt exchange plan issuers’ medical loss ratios in 2017, by pushing many young adults out of the market.
Alisha Baines Simon and Stefan Gildemeister, economists at the Minnesota Department of Health, have raised that possibility in a survey report prepared for MNsure, Minnesota’s state-based Affordable Care Act health insurance exchange.
The exchange, which has an office in St. Paul, Minnesota, is gearing up for the fourth annual ACA individual major medical coverage open enrollment period. The open enrollment period for 2017 is set to run from Nov. 1 through Jan. 31.
The economists found that use of individual and family coverage has increased significantly in Minnesota since Jan. 1, 2014, when the ACA brought the health insurance exchange system to life and put strict limits on medical underwriting.
Total Minnesota non-group health enrollment increased to 297,000 in 2015, from 248,000 in 2013, according to a survey results slidedeck.
The economists also found that enrollment in non-group major medical coverage appears to be getting more stable: 84 percent of the Minnesota residents who had non-group major medical coverage in 2015 kept the coverage all year, up from 80 percent who kept non-group coverage all year in 2013.
But, the economists found that only about 17 percent of the Minnesota residents ages 18 to 34 who used non-group coverage in 2015 qualified for help from the ACA premium tax credit subsidy program.
About 77 percent of non-group health coverage users in the 35-to-54 age group and 89 percent of the non-group health coverage users ages 50 and older qualified for subsidies.
ACA critis say the “age rating band” system may already discourage young adults from enrolling by making their premiums higher than they would be if insurers had more flexibility. (Photo: iStock)